A brutal wave of leverage-driven liquidations ripped through crypto markets after ether (ETH) plunged sharply, wiping out more than $2.5 billion in positions in just 24 hours. The most jaw-dropping casualty: one trader who lost over $220 million on a single ETH position.

📉 What Triggered the Meltdown?


The cascade began as ETH slid rapidly during a period of thin liquidity, amplifying losses across derivatives markets. Forced liquidations piled on top of each other, accelerating the sell-off and dragging down major tokens alongside ether.

According to market data, nearly 435,000 traders were liquidated over the past day. Long positions took the hit, accounting for over $2.4 billion of total losses, while shorts made up a relatively small share.

🧨 The $222M ETH Wipeout


The largest single liquidation occurred on Hyperliquid, where an ETH-USD position worth $222.65 million was forcibly closed. As ETH dropped as much as 17% intraday, margin thresholds were breached and the position was instantly wiped out.

Hyperliquid alone recorded $1.09 billion in liquidations, representing more than 40% of total market losses. By comparison:

  • Bybit: ~$574.8M liquidated

  • Binance: ~$258M liquidated

🔥 Ether Led, Bitcoin and Solana Followed

  • Ether (ETH): ~$1.15B liquidated

  • Bitcoin (BTC): ~$788M liquidated

  • Solana (SOL): ~$198M liquidated

ETH clearly bore the brunt of the damage, reinforcing its role as the most crowded leverage trade during the downturn.

📊 Why Liquidations Matter

Liquidations occur when leveraged positions are automatically closed after prices move beyond a trader’s margin limit. In fast markets, this can trigger cascading sell orders, pushing prices even lower and creating feedback loops.

Traders closely watch liquidation data because:

  • Large long liquidations can signal panic selling or potential short-term bottoms

  • Crowded leverage increases the risk of violent reversals

  • Combined with open interest and funding rates, liquidations can hint at future squeezes or relief rallies

⚠️ The Bigger Takeaway

This episode highlights a growing market reality: low liquidity + high leverage = explosive moves. Even modest price declines can snowball into billion-dollar wipeouts when derivatives positioning becomes overcrowded.

For traders, the lesson is simple but costly, leverage cuts both ways, and in volatile markets, risk management matters more than conviction.